Pricing Rules You Need to Know

Jessica Stillman is a freelance writer based in Cyprus with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist.

The list reveals, first, that people are strange. Given that money is obviously important to our quality of life; you'd think people would generally make sensible decisions around what they choose to buy and how much they pay for it. Nope, notes ConversionXL, "people are weird and irrational," but there are plenty of handy rules of thumb to help you deal with customers' odd behavior, the site notes. Here's a sample.

Use a Decoy

You'd think the key factor in deciding on whether to buy something is whether we want the iteam and it's worth the price, but in reality we often decide on purchases by comparing them to other options. Change those options and you'll change customers' preferences.

"When people were offered to choose a trip to Paris (option A) vs. a trip to Rome (option B), they had a hard time choosing. Both places were great, it was hard to compare them," explains the post, but when, "they were offered three choices instead of two: trip to Paris with free breakfast (option A), trip to Paris without breakfast (option A-), trip to Rome with free breakfast (option B). Now overwhelming majority chose option A, trip to Paris with free breakfast. The rationale is that it is easier to compare the two options for Paris than it is to compare Paris and Rome."

How to put this to use? Plant a decoy option that's clearly inferior: "If you add a slightly worse option that is similar to A (call it A-), then it’s easy to see that A is better than A-, hence many people choose that."

Show Them the Deal

Everyone likes a sale sticker. But they like a sale sticker that also lists the original price even more. "Researches found that sale price markers (with the old price mentioned) were more powerful than mere prices ending with the number nine," says the post. So a sign saying an item is currently $40 but was original $48 outsells a sign simply stating an item is on sale for $39. Even better, according to researchers, is a sign that lists the original price and has a current price ending in nine.